A Commitment to Repay Customers
Celsius Network, the distressed crypto lending platform, has approached the court with a restructuring proposal that envisions the start of customer repayments by the conclusion of 2023. During an October 2 hearing dedicated to seeking approval for its restructuring blueprint, the company's legal representative revealed plans for financial recuperation and customer reimbursement.
#Celsius will distribute at least $2.03B of crypto to Creditors.
— Celsius NewCo Community (@CelsiusNewCo) October 2, 2023
Meanwhile, NewCo will be seeded with up to $450 million in crypto.
Unveiling the Restructuring Blueprint
Christopher Koenig, Celsius's legal counsel, initiated the confirmation hearing in New York with a presentation outlining the emergence of a new entity, provisionally named "NewCo", backed by $450 million in seed funding. According to a September 29 filing, Celsius intends to use a combination of $2.03 billion in Bitcoin and Ethereum, along with shares in NewCo, to initiate partial repayment to its creditors.
Overcoming Legal and Creditor Hurdles
While the proposed restructuring plan has garnered the support of over 95% of voting account holders, it still faces opposition from a minority group of creditors and awaits the green light from Judge Martin Glenn and relevant security regulators. If approved, Celsius’s initiative would mark one of the initial successful revitalizations of failed crypto platforms through Chapter 11 bankruptcy proceedings in 2022.
